Category: Personal Finance

Medical education costs may double in the next decade—are you prepared?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Over 2 million students in India apply for the National Eligibility-cum-Entrance Test (NEET) and only 56% of them qualify.

It’s not enough to score well to secure a seat; there’s immense pressure on the NEET applicants to be closer to the top to be eligible for a pocket-friendly government college.

The cost of medical education in India outside the 108 functional government-owned medical colleges is prohibitively high.

What’s worse, the cost is likely to double in the coming years, according to a February 2024 report by analysts at Anand Rathi, a Mumbai-based financial services firm.

An MBBS (Bachelor of Medicine and Bachelor of Surgery) course costs, on average, ₹5 lakh and a postgraduate course costs ₹15 lakh. This could rise to ₹11 lakh and ₹15 lakh, respectively, by 2035.

Despite a 110% increase in MBBS seats in the country over the last decade, analysts say the education cost in India has increased by 11–12% in the previous ten years, at about twice the rate of overall inflation.

If the annual increase continues at 12%, the cost will double in six years. “In today’s day and age, a general MBBS degree does not fulfil the professional aspirations of students. A postgraduate degree costs another set of lakhs. A student spends close to a crore to become a specialised doctor,” says Atul Thakkar, the author of the Anand Rathi report.

The four-year MBBS degree at Dr. D. Y. Patil Medical College, Hospital & Research Centre in Pune costs approximately ₹2 crore, according to Dr Pravin Shingare, former Director of Medical Education and Research, Govt of Maharashtra.

The skewed demand-supply scenario inevitably drives the cost of medical education higher in private universities.

As of December 2023, there were 1,08,848 MBBS seats in government colleges and over a million applicants. Over 2 lakh applicants line up for just 68,000 postgraduate seats.

“The government itself spends nearly ₹35 lakh per student every year,” Shingare added.

Those who don’t make it to the government colleges must opt for 598 private outfits where student fees subsidise treatment facilities. Medical colleges in India are mandated to have hospitals on campus where patients get treated at a subsidised rate.

The high cost drives many medical students to other countries, such as Russia, Ukraine, Kyrgyzstan, China, Germany and Gulf countries where the courses are cheaper. Over 30,000 Indian students went abroad for medical studies in the last year.

While the government of India is trying to bring down the cost of medical education by increasing the number of seats in new colleges—tax incentives are also under consideration—the number of applicants will only go up given the country’s young population, whose aspirations grow with the economy.

“The best possible way to start planning for kids’ future education is when they are born,” Suresh Sadagopan, founder of ladder7 wealth planners, told CNBC-TV18.

The Sukanya Samriddhi Yojana, started by the government in 2015, is a debt investment plan with tax rebates where investors can expect about 8% returns. The saved amount goes to the child tax-free.

There are many mutual fund plans tailored for this goal with a track record to beat inflation.

Sadagopan says, “If there are plans to study abroad, investing in international funds can protect the funds against rupee depreciation”.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Is clearing your electricity bills with a credit card, a smart move?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Managing finances effectively is critical for financial well-being, and using a credit card to pay your electricity bills is a wise approach in this direction. Integrating this handy payment solution into your financial strategy allows you to make timely bill payments, take advantage of reward programs, and improve your overall money management. Explore the key benefits of using a credit card to pay electricity bills..

Advantages of utilizing a credit card for electricity bill payments

1. Convenience

Using a credit card to pay your electricity bill unlocks comfort and convenience as you can do so in just a few clicks, without stepping out of your house. This saves considerable time as well as effort, allowing you to focus on more pressing tasks. Moreover, most credit card providers offer the service of mobile apps and online portals, which makes it simpler and easier to manage and trace your credit card payments.

2. Reward points

The main advantage of paying electricity bills with a credit card is that you earn reward points. Many credit cards offer reward points for every rupee you spend on utility bills, including electricity bills. These points can be used for a variety of rewards, including gift cards, cashback, booking flights, and more, ultimately saving you money. For instance, the IDFC FIRST Millennia Credit Card earns 1X reward points on utility bill payments, such as electricity bills. You can accumulate reward points on this credit card over time and redeem them on in-store or online purchases, for substantial savings.

3. Enhanced savings

In certain situations or for certain expenditure categories, credit cards may offer additional reward points or payback, resulting in higher savings. For example, some cards provide more rewards for online purchases or when total monthly spending surpasses a threshold. By smartly utilising your credit card, you can optimise your savings not only on electricity bills but also on other expenditures. This allows you to maximise the benefits of your credit card’s rewards program while also saving money.

4. Better cash flow management

When you pay your electricity bills with a credit card, you have the option of repaying your dues up to 48 days later without incurring interest charges. This allows you to manage your cash flow better as you get more time to make your payments. This flexibility is particularly advantageous for those with fluctuating earnings or unanticipated needs, as it can act as a cushion to help you manage your funds more effectively.

5. Additional incentives

Certain spending categories are eligible for additional benefits on credit cards, which increases their use. With the FIRST Millennia Credit Card, for instance, you can earn 3X reward points on online purchases up to ₹20,000 per month. In addition, you earn 10X reward points on incremental spends above ₹20,000. The premiums of your insurance policy may also earn you 1X reward points. In this way, you can maximize the use of your credit card and save money by selecting one that meets your needs and lifestyle.

6. Savings on bill payments

Using a credit card to pay your electricity bills is a wise move as it simplifies the payment process while also providing a variety of financial benefits. You can manage your electricity bill payments, save money, and earn rewards if you carefully pick and use a credit card that suits your spending habits.

Note: This is a partnered post.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

How sensitised are you about retirement planning?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Have you ever considered how much corpus you will need for a comfortable retirement? This is a question that often catches people off guard. My recent interactions have consistently shown the surprising lack of awareness among well-educated individuals regarding the necessary retirement corpus. Thanks to modern medicines and medical interventions, lifespans are continuously increasing.

As a result, there is a genuine chance of running out of money if one does not plan retirement cash flows well. Using some real life example, let us see why it is critical for each and every one to plan for a substantial retirement fund.

The disconnect

In my first conversation with a finance professional holding a Company Secretary’s Degree, I was taken aback when she confidently stated that her Rs. 70-80 lakhs of investments would suffice for retirement. Similarly, a well-traveled individual with a successful career in the US showed surprising naivety about the amount required for a comfortable retirement in India. These encounters highlighted a common trend: educated individuals often underestimate the need for a robust retirement corpus, revealing a widespread lack of understanding about personal finance requirements.

Realistic example

Let us bring the point home with two examples. Mr. Sham, a 40-year-old professional, aims to retire in 15 years, requiring a monthly income of Rs. 1.5 lakhs to sustain his desired lifestyle. Considering a 7% inflation rate and post-retirement investment returns at 8.60%, Mr. Sham needs a corpus of Rs. 11.40 crores. On the other hand, Mrs. Ragini, aged 30, plans to retire at 55, seeking Rs. 1 lakh per month for a comfortable life. Her required corpus? A substantial Rs. 15 crores.

The time factor

The key takeaway is clear: to provide for 20-25 years of retirement, you must accumulate a considerable corpus during your working years. Yet, how many of us are aware of this reality, and more importantly, how many are willing to start planning as early as possible? During the earlier times, pensions and the presence of a joint family were great buffers due to which one never had to calculate for retirement days. In today’s time, inflation across the spectrum whether it is in food prices, medical care or medicines, the cost attached to services is steadily marching higher at a faster pace than ever before.

Retirement planning essentials

When embarking on retirement planning, one has to consider various facets, including asset mix, cash flow planning, and contributions to retirement schemes like employee provident funds, public provident funds, and national pension schemes. While the numbers may seem daunting, remember that starting early is the key to building a substantial retirement corpus. While we may think that several factors like entertainment costs and cost of daily commute to work will be saved, remember that with age medical costs increase. A single hospitalization can wipe out a significant portion of one’s savings if there is no adequate health cover.

The power of compounding

The reassuring fact is accumulating Rs.10 Crore is not difficult. If you start saving early and consistently invest Rs. 35,000 monthly for 30 years at a compounding rate of 11%, you can accumulate a comfortable Rs. 10 crores. This underlines the importance of early action in securing your financial future.

Given that the goal is long term in nature and may be decade or decades away, an investor can consider investing into equity schemes for this requirement. As one nears the goal say five to seven years away from retirement, it is important to transfer the corpus created to a debt or hybrid scheme basis’s one’s risk appetite. The aim of this move is to protect the corpus from equity market volatility as there is not much time left to recoup losses if the market enters a correction mode.

The important aspect to remember in this journey is to be consistent with one’s investment and not withdraw from retirement corpus to meet other unplanned expenses. While all of this may sound intimidating, the optimal approach is to seek the help of a financial advisor who basis your unique requirement will put together a retirement plan to meet your needs.

Author’s note: This article has been written by Kshitija, Director of Gaining Ground Investment Services Pvt Ltd.

Note: This is a partnered post.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

The secret of sound investing: Embracing the margin of safety

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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In the dynamic world of finance, where success and failure are orchestrated by the unpredictable rhythms of markets, navigating a reliable path can be elusive. However, within the revered annals of investing wisdom lies a deceptively simple secret: the margin of safety. Explained by Benjamin Graham and endorsed by his famous disciple Warren Buffett, this principle transcends time, serving as a fundamental philosophy—a sturdy rope in the investor’s toolkit, guiding through the fog of uncertainty.

But what exactly is this margin of safety? Picture contemplating a tempting stock, its price flashing alluringly on the screen. The margin of safety is the gap between this seductive market price and the stock’s intrinsic value (i.e. its true worth). It acts as a special lens, unveiling the asset’s concealed worth and potential beyond the whims of the market. Investing with a margin of safety transforms buying stock into acquiring a buffer — a layer of protection against unforeseen challenges in the volatile journey of financial markets.

Consider it akin to crossing a bridge over a tumultuous river. Without a margin of safety, navigating a volatile market is like a precarious dance on the edge of the bridge. But armed with that vital cushion, the journey becomes more secure—a safety net that can absorb shocks and keep investors upright even when the market sways.

Determining the margin of safety isn’t one-size-fits-all. It entails delving into a company’s core, analysing financials, exploring its competitive landscape, and understanding growth potential. This in-depth process, uncovers the true value hidden in the market’s noise.

Investors, armed with this knowledge, estimate intrinsic value, constructing a sturdy investment bridge with careful calculations. Once both the market price and intrinsic value are determined, the magic unfolds. Calculating the difference reveals the precious gap between market perception and true value—a bridge leading from speculation to calculated risk, known as the margin of safety.

Let’s explore an example to illustrate the concept. Through rigorous fundamental analysis, an investor determines that the intrinsic value of Company XYZ is Rs 100 per share based on its robust financials, market position, and growth prospects. In this scenario, the investor identifies a Rs 30 gap between the market price (i.e. Rs 70) and the intrinsic value (Rs 100) – this Rs 30 difference represents the margin of safety.

By purchasing Company XYZ’s stock at Rs 70 when its intrinsic value is assessed at Rs 100, the investor creates a buffer that protects against market fluctuations. If unforeseen challenges arise, causing the stock price to dip, the investor still has a cushion of Rs 30 per share before the investment reaches its intrinsic value. This gap provides a safety net, allowing the investor to weather short-term market volatility without incurring substantial losses.

But why is this principle critical? Firstly, it minimizes the downside risk. By buying below intrinsic value, even if the market takes a tumble, losses are cushioned. Think of it as a safety net strung below the bridge, catching us if we stumble but allowing us to climb back up with relative ease.

Secondly, the margin of safety amplifies the potential for superior returns. When we buy at a bargain, any upward movement in the stock’s price translates into a larger percentage gain. It’s like building a higher bridge, giving us a clear view of the potential rewards on the other side.

Finally, this principle cultivates an investor with the mindset of discipline and patience. It discourages emotional buying and selling, instead fostering a focus on long-term value and fundamental analysis. It’s like replacing a rickety rope bridge with a solid steel structure, allowing us to navigate the market with calm determination, unfazed by fleeting market frenzy.

Of course, the path of seeking a margin of safety isn’t easy. It requires patience, discipline, and a willingness to dig deep into the world of financial analysis. But the rewards are substantial, offering a sense of security, the potential for superior returns, and the peace of mind that comes from knowing you are not at the mercy of market whims. It is this crucial understanding of the Margin of Safety that separates the savvy investor from a mere speculator, and it is the key to unlocking the true potential of your financial future.

Note: This article has been authored by Rajesh Lakkisetty of Rajesh Financial Services.

This is a partnered post.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Paytm launches Made in India soundboxes, enables credit card-based UPI payments

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Indian fintech giant Paytm on Monday launched two Made-in-India soundboxes for UPI and credit card on UPI payments that promise to provide better instant notification when payments are received via QR code.

Founder and CEO Vijay Shekhar Sharma said the advanced soundboxes provide superior sound quality and battery life, making them better suited to Indian conditions.

Live now ! https://t.co/IQB8M2GtZr

— Vijay Shekhar Sharma (@vijayshekhar) April 22, 2024

The launch came as One97 Communications Ltd, which runs Paytm, completed the migration of merchant customer accounts from Paytm to other unified payments interface (UPI) handles.

The company on April 17 started the customer migration to partner payment service provider (PSP) banks Axis Bank, HDFC Bank, SBI and Yes Bank. A PSP is a bank that helps the UPI app to connect with the banking channel. Only banks can act as PSPs.

The Paytm UPI customers were until now using Paytm Payments Bank Limited (PPBL), an associate company of One97 Communications Ltd as the PSP bank but its operations were crippled after RBI imposed restrictions.

Sharma said the soundboxes were created to address the high-noise environment in India. He went on to describe them as “legitimate India innovations”.

The launches include new sleek versions of the Paytm soundbox and pocket soundbox.

The waterproof sound boxes are equipped with 4G connectivity, instant audio confirmation, powerful speakers, long-lasting battery life of up to 10 days, and support notifications in 11 languages, the company said in a statement.

“Paytm Soundbox brings the power of Rupay Credit Card on UPI, offering zero MDR to small merchants for transactions under ₹2,000. This service allows small businesses to save on transaction fees, expanding their profitability and making it easier to adopt digital payments,” it said.

Sharma said one can start accepting Credit Card payments with the new soundbox, and store credit cards in the Paytm app to do seamless transactions.

“Although we are a software payments company, we work on hardware too and give equal importance to battery, quality, clarity, and other things, which is very exciting,” Sharma said.

Praising the software team at Paytm, he said the team has done a good job in ensuring that a great amount of effort is given to software efficiency.

“The combined power of both software and hardware is absolutely lethal.” “We are committed to expanding the UPI payment ecosystem in every nook and corner of India,” he added.

The Reserve Bank of India had recently ordered the banking unit, Paytm Payments Bank (PPBL), to stop accepting fresh deposits in its accounts or popular wallets, following non-compliance with norms.

On being questioned on the PPBL issue, Sharma said, “I personally, or One97 Communications Ltd, have no connection with the PPBL. The bank has its own board, and we have full faith in it,” refusing to comment any further.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

HDFC MF to launch manufacturing fund on April 26: Should you consider investing?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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HDFC Asset Management Company (AMC), the investment manager to HDFC Mutual Fund (HDFC MF) on Monday (April 22) announced the launch of HDFC Manufacturing Fund. This open-ended equity scheme aims to unlock the potential of India’s manufacturing sector by investing predominantly in equity and equity-related securities of companies engaged in manufacturing activities, HDFC Mutual Fund said.

The new fund offer (NFO) for HDFC Manufacturing Fund will start on April 26, 2024, and conclude on May 10, 2024.

Investment focus

The HDFC Manufacturing Fund’s primary objective is to tap into India’s manufacturing sector’s growth potential.

It will focus on investing in companies operating across diverse sectors within the manufacturing theme.

Investment strategy

The fund’s investment strategy will emphasise a core portfolio with at least 80% investment in stocks representing various sectors under the manufacturing umbrella.

This approach will provide investors with exposure to a broad spectrum of opportunities within the manufacturing landscape, HDFC Mutual Fund said.

Flexibility

With a flexible approach towards investments across different market capitalisations, the HDFC Manufacturing Fund will offer investors the opportunity to explore a wide range of opportunities within the manufacturing sector.

Rationale behind the launch

India’s manufacturing sector is poised at a pivotal juncture, characterised by factors such as rising consumption, increased investments, expanding exports, and governmental reforms aimed at promoting self-reliance.

The launch of HDFC Manufacturing Fund aligns with the country’s journey towards becoming a global manufacturing powerhouse, the mutual fund house said.

The fund will be managed by Rakesh Sethia, a seasoned professional with over 19 years of experience in equity research.

Speaking about the investment style, Sethia emphasised bottom-up research aimed at identifying companies with compelling long-term growth stories.

He added, “We seek to construct a portfolio that balances established industry leaders with emerging disruptors, ensuring a diverse mix of opportunities within the manufacturing sector.”

Investment considerations

HDFC Manufacturing Fund’s investment objective is to provide long-term capital appreciation by identifying companies poised to benefit from India’s manufacturing resurgence.

However, as with any investment, individuals should conduct thorough research and consider their financial objectives and risk tolerance before making investment decisions.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

HDFC Bank’s net banking down, lender says ‘actively working to resolve’ issues

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Here’s why gold prices declined today | Check latest rates in your city

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Gold prices fell more than 1% on Monday (April 22) as concerns of a broader conflict in the Middle East eased prompted investors to embrace riskier assets. This reduced the appeal of gold as a safe-haven investment, experts said.

As of 0929 GMT, spot gold recorded a 1.2% decline, settling at $2,362.09 per ounce, while US gold futures saw a 1.6% drop to $2,376.10, according to news agency Reuters.

Back home,  gold for June delivery fell by 1.04% to reach ₹72,050 per 10 grams on the Multi Commodity Exchange (MCX).

Here’s a table displaying the gold rates in various cities in India (as of April 22):

Analysts attribute the decline in gold prices to diminished likelihood of immediate rate cuts by the US Federal Reserve.

Reports suggest that a rate cut may not materialise until September, which has dampened the demand for gold as a hedge against inflation.

Additionally, the strengthening of the US dollar and rising bond yields have further propelled the downward trend in gold prices.

The recent drone strike by Israel on Iran, which was met with subdued responses from Tehran, has alleviated concerns of an escalation in tensions between the two nations.

This has also diminished the need for safe-haven assets like gold.

Despite the current setback, analysts remain optimistic about the long-term prospects of gold.

Citi research forecasts a surge in yellow metal during the second half of 2024, with gold projected to reach $2,500 per ounce.

However, there may be a temporary pullback in prices before the end of the second quarter, it said.

In a recent conversation with CNBC Awaaz, Mahendra Luniya, Chairman of Vighnaharta Gold, projected that gold rates may reach ₹1.68 lakh per 10 grams by the year 2030.

ALSO READ | Looking to buy physical gold amid bullish outlook? Know purchase limits and taxation rules

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Red hot hybrid funds got nine times more money

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Hybrid funds have recently emerged as the red-hot destination for investors seeking a balanced blend of stability and growth. In the financial year 2023-24 (FY24), the mutual fund industry recorded ₹3.55 lakh crore, marking a 366% rise from the previous year’s inflows of ₹76,225 crore.

Among the various categories of schemes, the hybrid category experienced the most significant transformation in inflows.

The net flows of hybrid funds skyrocketed by 870% to ₹1.45 lakh crore, compared to the negative flows of ₹18,813 crore in FY23.

Let’s delve deeper into the numbers to understand the magnitude of this shift:

The Assets Under Management (AUM) of the hybrid category surged to ₹7.2 lakh crore, showcasing a 51% increase in FY24.

This surge in inflows wasn’t isolated but rather a reflection of a broader trend where most asset classes exhibited strength.

(Source: FYERS; inflows and outflows of hybrid funds FY23-FY24)

The reasons behind this rise in hybrid funds can be attributed to several factors.

As per brokerage firm FYERS, the income/debt category saw lower outflows as investors anticipated a pause in the interest rate hike cycle.

Sensing this shift, investors reallocated their investments from debt to equity and hybrid categories, seeking better returns and tax advantages.

Chakravarthy V, Co-founder and Director of Prime Wealth Finserv emphasised the role played by the arbitrage category in driving this surge.

“This surge is primarily driven by substantial investments in the arbitrage category, which alone accounted for ₹90,846 crore,” he stated.

Notably, arbitrage mutual funds operate on a unique investment strategy that capitalises on price discrepancies between various market segments.

These funds typically consist of two main components: the equity book and the debt book.

Chakravarthy V further explained that recent tax changes eliminating indexation benefits for debt funds held over three years have influenced this shift.

“Investors are seeking favourable tax treatments and diversified investment approaches,” he told CNBC-TV18.com.

Abhishek Jain, Head of Research at Arihant Capital, echoed similar sentiments, highlighting the impact of tax rule changes for debt funds on the surge in interest for hybrid funds.

“Hybrid funds offer a blend of equity and debt exposure, appealing to investors seeking diversification across asset classes,” he explained.

It must be noted that the loss of the indexation benefit on Long-Term Capital Gains (LTCG) has rendered debt funds less attractive to investors now.

Consequently, investors are exploring alternative investment avenues, and many have found their answer in hybrid funds.

This is because hybrid funds invest primarily in equities.

This is why they are taxed as equity funds, and the tax rate is much lower for them than the ordinary income tax rate levied on other types of funds.

Additionally, high bond yields, which persisted due to unexpected rate cuts, maintained investor interest in hybrid structures.

These structures offer stability from debt components while providing growth potential from equities.

“This further make them an attractive option for risk-conscious investors,” Chakravarthy V said.

Alekh Yadav, Head of Investment Products at Sanctum Wealth, shed light on the cautious approach of investors towards equity markets, given the concerns around valuations.

“Hybrid funds allow investors to allocate some of their investments to equity while not being fully committed to equities,” he stated.

This flexibility, coupled with the ability of hybrid funds to increase equity allocation during market corrections, instills confidence in investors, driving increased inflows into hybrid funds.

Returns and investment considerations

Hybrid funds function on an automatic asset allocation methodology, which helps investors get better returns.

For hybrid funds, market volatility is a blessing in disguise, experts say.

For instance, if someone invests in an equity-oriented hybrid fund with a 60% equity and a 40% debt allocation, when the equity market corrects, the fund will automatically rebalance by buying additional equity, potentially leading to higher returns when the market rebounds.

Here’s a look at recent returns of some of the aggressive hybrid funds:

(Source: Moneycontrol)

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Shriram Finance launches digital-only fixed deposit scheme with interest rate of 8.15%

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Non-banking financial company Shriram Finance is offering a digital-only fixed Deposit (FD) scheme that can be obtained via its One App and website from Monday, April 22, 2024. Usually, SFL’s products are available in India both online and through their physical presence, Shriram Finance said.

Customers would be able to obtain a Shriram Unnati FD with a tenor of 15 months at a rate of interest of 8.15%.

Senior citizens and women depositors can get an additional benefit of 0.50% and 0.10%, respectively, while all depositors can claim an additional benefit of 0.25% on renewal of the FDs, done digitally or through online channels, Shriram Finance said.

While Unnati FDs with other tenors will be available both online and offline, the specific 15-month FDs will only be available for purchase through the Shriram One App and its website.

The minimum deposit amount would be ₹5,000.

Along with the new launch, SFL has also made its Fixed Income Plan (FIP), or Recurring Deposit (RD) currently marketed through digital and offline mode, exclusive to the Shriram One App and SFL website.

Also, SFL has increased the interest rates for the said product as under:

There will be an additional interest rate benefit of 0.10% for woman depositors.

The minimum deposit amount would be ₹1,000 a month.

Both the digital-only FD and the FIP (Recurring Deposit) scheme will be available on the Shriram One app and the Shriram Finance website from April 22, 2024.

From that date onwards, customers would no longer be able to book FIPs physically at branches or through the company’s representatives.

Commenting on the new products, Umesh Revankar, Executive Vice Chairman, Shriram Finance said, “With our new digital-only offerings, we wish to accelerate the digital India movement and enable depositors to grow their wealth through convenient means.”

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow